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How does being an authorized user affect credit score
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Question By
wndrwmn67

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I was added as an authorized user without my permission and it absolutely showed up on my credit score. It also factored into my utilization ratio, quite negatively. I didn't know for months that I was listed as a user, then it took months for Citi to remove me. I've reported it to the agencies but the damage has been done. My score dropped almost 100 points. 

Response by
thetaphi09

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Once you removed it, how long did it take for your credit score to rebound? I am in the same situation.  My mother made me an authorized user on the accounts with very high credit lines... but  zero balanes,,,, it ruined my chance for future credit because it pushed potential obligations to income to the extreme...

Reply by
Tailgater

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This is to Tailgaiter (commenting doesn't seem to nest beyond one reply)

Tailgaiter - that actually doesn't make sense. If you were added to accounts with very high credit lines (I assume you mean limits) but zero balances, that would be excellent for you. I assume you mean something like "0 balance / 15,000 limit." This would make your utilization very, very low - which is excellent for your credit score.

If, however, you were added to an account that looked like this: "14,000 balance / $15,000 limit" - that would indeed be very bad for your score.

Just wanted to clarify that. If your score did go down then there was a reason, but being on a 0-balance / high limit card wasn't it. 

Reply by
darkblue04

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That's not true. As an authorized user, the available credit, amount owed, and debt to income all reflect on the user's credit report and score regardless of the account's standing.

There was a lot of drama a year or so ago when agencies were seeking to close a loophole created by people "buying" authorized user space on other people's accounts, but due to the large number of husbands and wives who share cards without ever considering the difference, bureaus reversed themselves and report accordingly.

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Response by
Madlock

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Nathanmedic is correct. Piggybacking works because of the Reg B requirment. 

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Reply by
hardeight

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No, actually, I am not, and I did more complete research to back up what I've said. As I stated, your credit can be damaged because authorized users are often INCORRECTLY reported to credit bureaus by collection agencies and credit card companies. Please read the link below for the thorough information that states how this happens and why you are NOT LEGALLY RESPONSIBLE FOR A DEBT if you are only an authorized user. Here is what you should do if you ARE seeing negative items about yourself on a credit report if you are only an authorized user:

Collection Efforts and the Authorized User

If a creditor or debt collector is pressuring you to pay a debt on a credit card when you were nothing but the authorized user, we recommend that you take the following steps.

"1. Do not agree to pay the debt or send in any partial payment on the debt no matter what they threaten to do. And remember, paying the debt will not improve or restore your credit rating.

2. Find out if you are indeed nothing more than an authorized user. In other words, make sure you are not really a joint accountholder, which would make you liable for 100% of the debt. You can do this by pulling your credit report. On the credit report you will find a single letter notation that designates you as a J - Joint accountholder or A - authorized user on the account in question.

3. If you are nothing more than an authorized user, send the creditor or collector a certified mail, return receipt requested letter denying liability for the debt on the grounds that you are only the authorized user and are not legally responsible for the debt. You can send along a copy of that portion of your credit report showing you as nothing more than the authorized user if you like. Your letter should also tell them to leave you alone, to stop calling you and that you will be reporting their attempt to collect a debt from you when you are not legally responsible for it to the Federal Trade Commission and the Attorney General's office of your state. If you know in what state the creditor or debt collector's company is based, you can also file a complaint with the Attorney General in that state for their deceptive trade practices.

It is important that you take the time to write the certified letter above because you want written proof that you dispute the debt and that the other party received notification that you dispute the debt. Legally, a creditor or collector is not supposed to add a collection account regarding the matter to your credit report if you dispute its validity within a timely manner. Write this letter as soon as possible."

This is why I always strongly recommend that people do their own research on the subject rather than relying on us here, just trying to help each other out. The laws can be tricky, and everyone has their personal stories. I guarantee you that I'm not an expert, but I have researched this pretty thoroughly.

Hope this helps you ... and definitely no offense intended, Madlock. At least you made me research it again. ;)

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Reply by
nathanmedic

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You are at least partially mistaken.

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Reply by
Madlock

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You are not making the distinction between "joint card holders" and "authorized users". If the person had to apply (provide income information, SSN, etc.), then they are a joint holder and their credit is as affected as the other individual. If they are simply an authorized user that the MAIN CARD HOLDER authorized, their credit cannot be affected. My own sister, unfortunately, ran up credit on one of my cards as an authorized user. While it helped send me to bankruptcy, not a thing showed up on her credit report. There is more information on this simply by searching the web.

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Reply by
nathanmedic

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 While you are not responsible for a debt as an "authorized user", the credit reporting agencies like to include the account on your report so that a "debt buyer" can use it to collect from the authorized user (who may have a good credit score) when they can't collect from the actual account holder.  Keep in mind, the CRAs sell this information to debt buyers and they include information about who's more likely to pay the debt.  I have a lawsuit against Equifax for this very issue.  Experian and Transunion removed the account when I disputed it as "not mine".  Equifax refused to remove it.  The account belongs to my wife and it's now in collection.  I removed my name as an authorized user and Equifax still refused to remove the account.  I disputed it no less than 3 times.  Now that it's in dispute for one last time while the lawsuit is still pending, they have no choice but to remove the account or report the accurate status as in collections....and of course, if they report the current status as "in collections" to damage my credit score, they're asking for trouble since they already knew the account was not mine and I've never been a co-obligor on the account.  The CRAs know that consumers are ignorant to the law...so do the debt buyers.  I'd advise every consumer to get familiar with the provisions of the Fair Credit Reporting Act and file a lawsuit if the CRAs refuse to remove these accounts when disputed.  In most cases, you don't need a lawyer to do this and many lawyers won't take a case like that because of the small amounts involved for statutory violations ($100-$1000).  If they intentionally refuse to remove after a reinvestigation, the potential for punitive damages is triggered and there's no set limit as to the amount of punitive damages that can be awarded.

By the away, before filing a lawsuit against Equifax, I began using screen capture software to capture proof when I submitted disputes to Equifax via their online dispute system.  Why?  They can and did change my disputes after they were submitted and in some cases the diputes fell into black holes and weren't responded to....also cases where they provided false dispute results without a corrected credit file forcing me to purchase new credit files only to realize what they said they deleted or corrected wasn't true.

Also beware of the bogus fraud alert on your equifax credit file.  If you only see the words "Extended Fraud Alert" on your credit file with no statement and contact info, you are on their VIP (blacklist) and they will make everything a living nightmare for you anytime you file a dispute or attempt to get free credit files.  Also, they may tell you that you're required to pay for a security freeze when you're in a state that doesn't require a fee...this is done by intentionally prevented you from placing a freeze via the web site or the automated phone system.....the VIP status flag is used to block the services.  The ViP status flag will also block any attempts by you to get credit monitoring unless you purchase that service directly from Equifax (akin to Extortion...i.e. you can either pay us to monitor your files or we will block your attempts to monitor your equifax credit file.).  I know they do this because after they added the VIP flag to my file, I was unable to monitor the equifax credit file via IdentityGuard, Transunion or Bank of America PrivacySource.  I ended up paying for the monitoring and cancelling because Equifax refused to remove the VIP (blacklist) status block.

Lastly, items on your credit file which you are only an authorized user do in fact affect your credit scores.  Some people use it to increase their scores, but they're scores will be affected negatively if (1) the credit limit is decreased and the highest balance is lower than the limit or (2) the account goes into collection after default.  Don't forget, the collection company can attempt to collect from you as an authorized user if they think you are not aware that by law, they can't collect....but they'll still damage your credit by verifying the account when you dispute it which will continue to lower your score until or unless you get the account removed. 

Response by
ArtBHill

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My husband's card for which I am an authorized user affects my score on here and on other reports I have pulled.  Although I am only an authorized user and not a joint user (did not apply for card myself or have credit pulled for it) it still shows as an account and affects my credit card utilization (even though in actuality I have no access to card) as if it were a regular account.  Maybe the above statements are right, and if you jump through some hoops and write letters to company they may change that, but be aware the default is for it to affect you unless you do all that.  Also in my case I don't have access to the card so I would not be able to provide account number to write them to ask for removal.  So be careful.  Better not to be authorized at all it seems.

Response by
stormey

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It will show on your credit
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I am an authorised user on 2 of my wifes credit cards.  One of them she gave to me before we were married over 20 years ago.  Currently due to changing a password change,  our automatic bill pay did not pay the credit card for 2 months obvioulsy lowering both of our credit scores.  So I have done a bunch of research to see if this is legal.  It appears to be treading a grey undefined line.  Any comapny can report to the credit agencies without your authorization.  In other words,  although it would be illegal for me to do so,  I could litteralyy report bad credit to anyone as long as I have their name and address only.  What they can not do is pull and see your report without your authorization.  So with that said, it has come to my attention that these creditors now use the "aiuthorised users" as leverage or extortion to try and get money out of them if the account defaults.  However in these cases, you are not liable for any of the charges and they can not come after you.  THey can simply harrass you  by making you believe that you are as responsible then the account holder.  UNless you are a co signer and gae them your SS# to add your name to the acccount, you are not liable for the money owed, however this will likely (not in every case) be reported on your credit. Good or bad.  Is this legal?  I dont know.  I think it is legal since no company requires your authorization to post good or bad credit information to the credit bureaus.  I hope this helps.  I evenfound several cases where employees were being harrased by bill collectors because they were at one time an authorised user on the corperate account.

What are we going to do about this?  This is obvioulsy a huge oophole in our credit system.  Think about it.  If I wanted to, today, I could call my CC company,  add a enemy to my account, never give them a card or tell them I have ever given them a card, stop making payments, and their credit would be affected at the same rate as mine would be.  This seems obvioulsy not only wrong but imorale. However the credit bureaus are facilitating this because in order to report tp the credit bureaus, you have to pay.  So guess who makes more money when they report all authorised users?  The cr4diut bureaus do?  And in turn,  the credit companies now have an effective tool to extort money out of people that have no real liability on the charges that were made. This is just a big mess.

Response by
ddelor

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It seems like this thread has split into two separate topics.  I thought from the original title, it was meant to address how being an authorized user affects your credit score (based on limits, balances, age, uitlization rate, etc.). The topic has gone into great detail regarding who is liable for payment when an authorized user.  I'm not sure I've seen a clear answer on the original topic.

I have added my wife to two of my credit cards with high-limits. One has no balance and is kept because it is >15 years old, the other is the card we "use" on a monthly basis because it has a good points program.  Both show on CreditKarma under my wife's name and impacts utilzation, total balance and total limit.  I guess I'm trying to find the risk / benefit of doing this.  Of course, I need to keep her as an authorized user on the account which we truly use / share, but what about the other no-use, zero balance, high-limit, long-aged account?  I'm trying to decide whether to take her off as authorized user or not.  She has her own card with zero balance with very high limit as well, so it's not like I would be taking her down to a low total limit.  Thanks

Response by
tartan23

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My ex-husband had me as an authorized user on his credit cards. He lost his job and was unable to make the payments and now they all show up on my credit report. I've read different things saying that as an authorized user they would not figure into my credit rating, but I've also heard that if they are in collections, they would. I have no idea what is the right answer. Thank you for your response.

Response by
wndrwmn67

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This is a fairly common error by reporting agencies (well, not so much an error as they want someone to pay - it's a "dirty tactic" you could say". If you were nothing more than an authorized user, you can absolutely dispute these items on your credit report. The company likely put them there in an effort to get SOMEONE to pay since your ex- wasn't doing it. And it definitely makes no difference as to whether they were late or in collections or any other status - if you were just an "authorized user", you can demand that they be removed. I wish you the best!

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Reply by
nathanmedic

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What that means is, if they use your credit card, you don't get any rewards or such for them using it. It helps them gain a line to credit and show that they are also paying towards the deb they use. but the account remains in the primary a/c holders name and only the primary a/c holder is responsible for debt incurred.

so debt collection agencies really have to go to the primary a/c holder and not the authorised user. In this manner, your credit score can be ruined by an authorised user.

Response by
SamViper

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More research

Here is a link that could prove useful to those who are stll uncertain as to whether they owe the debt as an authorized user.

http://www.creditcards.com/credit-card-news/ossenfort-credit-card-authorized-user-collections-1292.php

Response by
bryanp100

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Yes, they will remove the account and it will shorten your average credit history. The difference in your credit score is pretty minimal - I recently went from an average of 5 years (with a long of 15 years) to an average of 2 years, and it dropped my score by 4 points (I am around 700, building back from an '02 bankruptcy).

If you have late payments (because of your ex-), this is a far more negative weight than the positive of reducing the length of credit history, not to mention it might get eventually removed anyway. Also, if the account is still open, don't even THINK about leaving the chance that you could get burned further. That would truly be asking for trouble. My sister managed to do this exact thing to me - to the tune of $8,000 (part of my bankruptcy!) - and that was my own family! Yikes! :)

Good luck,

Nathan

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Response by
nathanmedic

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